How to Achieve Greater Privacy in Your Will

The genealogy website has recently uploaded more than six million probate records covering the period from 1942 to 1966.  These include the details of many famous wills and reveal such fascinating snippets as the fact that the Welsh poet Dylan Thomas left only £100 on his death (the equvalent of £2,300 today) whilst the children’s author Beatrix Potter was much more financially successful, leaving her husband an estate that would be worth nearly £8 million today.

Interesting though this information is, both to the genealogist and to the general public, some people may wish to keep their assets and who inherits them away from the public domain.  As every will becomes publicly available once admitted to probate, and each Grant of Probate or Administration will give at least an indication of the value of the estate, how can greater privacy be achieved?

If your concern is keeping the identity of your beneficiaries under wraps, this could be achieved by leaving a sum of money to a nominated person to distribute as you direct in a document separate from the will which would not be admitted to probate.  This is known as a secret (or in some cases half-secret) trust.

Alternatively, you could consider setting up a ‘pilot’ trust in your lifetime over, say £10, and then leaving assets to the trustees in your will to hold upon the terms of the trust.  Again, the trust document would not be admitted to probate and the identity of the beneficiaries of the trust would remain known only to those you choose.

Letters of wishes can also be used to distribute furniture, art, jewellery and other personal effects which keeps this information out of the public eye, both as to the exact items owned and the identity of the recipients.

If your wish is to avoid the exact amount of your assets becoming common knowledge on your death, giving away assets during your lifetime, either outright or to trusts, can be a way of achieving this, subject to tax and affordability constraints.

Assets such as insurance policies can be put outside the estate by writing them in trust.

Finally, if all your assets are held in joint names, they will in most cases pass on death to the surviving joint owner - although this does depend on whether the assets are held as "joint tenants" or "tenants in common" and you should seek legal advice if you are in any doubt.  If all your assets are held as joint tenants then you probably won't need a grant of probate, thus maintaining complete confidentiality.

Privacy from the tax man is a different matter and all assets, including trusts in which you have an interest and gifts made in the last seven years before death, still have to be declared to HMRC by your executors even if it's not necessary to declare them for probate purposes.

Billy Elliott Actor wins claim against HMRC

The First-Tier Tribunal (FTT) has accepted a claim by actor Tim Healey that the accommodation expenses he incurred when acting in a play in London were incurred wholly and exclusively for the purposes of his profession, being made necessary because of the itinerant nature of his occupation.

Mr Healey appeared in the musical 'Billy Elliott' on a series of short-term contracts. When rehearsals were in progress, he stayed with a friend in London and shortly after the opening of the musical, he rented a flat near to the theatre.

HM Revenue and Customs (HMRC) opposed the claim on the basis that Mr Healey had moved to London during the period and this meant that the costs were not the costs of travel and subsistence but normal household and accommodation costs.

The accommodation and subsistence expenses claimed totalled more than £36,000. A further £4,000 was claimed in taxi fares.

HMRC opposed all the claims.

The FTT considered that as regards the accommodation alone (the cost of which exceeded £32,000), Mr Healey had a good claim. He had, as a matter of fact, not transferred his permanent base of operations to London.

However, the claims for subsistence and taxi fares were rejected. Not only had he failed to show that these were additional costs wholly and exclusively related to his profession but also he had failed to retain receipts.

Paintings Are Not Furniture, Fixtures and Fittings

The Earl of Cardigan, who has been in the press recently due to his daughter’s appearance on the TV prpgramme “The Voice”, has lost a case he brought against the trustees of his family estate at Savernake Forest in Wiltshire.

The Earl had sought to prevent the sale by the trustees of some family paintings, which the trustees wished to sell to raise money for the estate.  One of the arguments put forward on the Earl’s behalf was that many of the paintings had been leased to him in 1999 together with Savernake Lodge, which he occupies.

The lease to the Earl included the 'furniture, fixtures and fittings' in Savernake Lodge.  The court has held that paintings do fall within that definition and that, in any case, the trustees were entitled to have the lease set aside as at the time it was granted the Earl was a trustee of the estate and so was prevented from selling or leasing trust property to himself (the so called 'self-dealing rule' intended to prevent conflicts of interest).

New Strategy for Charitable Trustees

Charity Trustees shoulder a substantial burden of responsibility, especially the trustees of charities that deal with vulnerable people.  To assist them with this duty, the Charity Commission has revealed a new strategy that consolidates key guidance for charity trustees and is designed to help them to safeguard children and vulnerable adults.

The Commission's key guidance documents include the following:[bulletlist]

Please contact us if you would like guidance on any matter relating to charity law or your role as a trustee.

Budget Tax Break for Non-Dom Spouses

The Government has announced that it intends to increase the amount that a UK-domiciled person can transfer to his or her non-UK domiciled spouse or civil partner free of Inheritance Tax.

At the moment, the spouse-exemption is limited to £55,000 in these circumstances (in all other cases, the spouse exemption is unlimited).  Under the new proposes, the limit will be increased to £325,000.  This is in line with the Nil Rate Band Allowance and will increase in line with it in the future.

The Government also intends to allow non-UK domiciled persons who have a UK-domiciled spouse or civil partner to elect to be treated as domiciled in the UK for the purposes of IHT.

It is understood that the change is being introduced by the Treasury to avoid a legal challenge from the EU.

European Court Rules Next of Kin Includes Adoptees

A case decided by the European Court of Human Rights (ECHR) has applied anti-discrimination law to confirm that adopted children are 'statutory next of kin'.

The case concerns a £3.2 million trust set up by a father in 1948 for the benefit of his daughter.  She benefitted from the trust during her lifetime.  When she died, she had no surviving parents, siblings or children.  She had had a sister, but that sister had died before her, leaving two adopted sons.  The trust deed stated that if the daughter was childless and her sister died before her, the trust fund passed to her 'statutory next of kin'.

The Court was asked to decide whether her nephews by adoption fell within the definition of statutory next of kin.

The Court held that the definition of statutory next of kin did not include the adopted children as that was the relevant law in 1948 when the trust was created.  However, the Court also decided that the ECHR could affect the trust and that the trust should be interpreted to eliminate discrimination against the adopted sons.  Thus the trust fund should pass to the sister's adopted children rather than to distant cousins.

Local Authority Trustee Feels Wrath of Charity Commission

A local authority's failure to understand the difference between the assets of a charity and its own assets has brought a stinging rebuke from the Charity Commission.

The charity, The Knotty Ash Special School Trust (which provides special education services and facilities to schools in Liverpool), appointed Liverpool City Council as its sole trustee.  The Council allowed one of its employees to occupy a lodge owned by the charity, rent-free for over 20 years.  This caused a loss to the charity of £89,000.

The Charity Commissioner's report reminds trustees that they must use charity assets reasonably, and in furtherance of the charity's objects. They must always act to protect property owned by the charity, monitor its condition and ensure that it is being used properly.  Failure to do so can result in trustees facing personal claims for compensation if their charity suffers a loss.

Please contact us if you would like advice about your rights and responsibilities as a charitable trustee.

Cowboy Will-Writers in Last Corral

The Legal Services Board (which is the independent body responsible for overseeing the regulation of lawyers in England and Wales) has announced that both will-writing and the administration of estates are to be brought within the list of 'Reserved Legal Activities'.

'Reserved Legal Activities' can only be carried out by authorised or exempt persons, such as for example Solicitors, Barristers and Legal Executives.

The move follows a persistent stream of cases of maladministration of estates and problems with wills drafted by unqualified will-writers.

Examples of malpractice by unregulated will-writing companies include:[bulletlist]

  • approaching young mothers in shopping malls, telling them that their children would be taken into care after they died if they didn't make a will,

  • charging an elderly man £12,000 for executor services, only for his family to find out after he had died that the will-writing firm had gone out of business and had disappeared with his will and the money, and

  • dumping 1000 wills in a street when the company went out of business.[/bulletlist]

The changes are aimed at ensuring that people who charge for Wills Drafting or administering the estates of Deceased Persons are 'fit and proper persons' and are registered with an appropriate regulatory body that will ensure that acceptable standards are maintained.

All practitioners in these areas will also have to carry professional indemnity insurance also.  Many people who have suffered loss due to the activities of 'cowboy' will-writers have later found that their attempts to gain compensation have been stymied by the absence of insurance on the part of the will writer.

We at Armstrong's are properly insured, properly qualified professionals, who specialise in this area of law.  Please contact us if you would like advice about making a Will.
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Armstrong’s raises £1,375 for worthy causes

We're pleased to announce that, by taking part in last November's Will Aid scheme, we raised £1,375 for nine of the UK's best loved charities, including Age UK, Save the Children and the British Red Cross.  In all, Solicitors in the UK raised over £2,000,000, which is a new record for the campaign.

Thank you to all our clients who took part and for the generous donations.

Attorneys and Gifts

A frequently asked question by an Attorney under a Lasting 0r Enduring Power of Attorney is whether he has the right to make gifts on behalf of the Donor of the power.

In practice, the power of attorney will normally allow certain gifts to be made by an Attorney on the Donor's behalf.   The right to make gifts is, however, limited and normally restricted to appropriate birthday / seasonal gifts and charitable donations.  Such gifts must be appropriate in the context of the value of the Donor's estate.  In each case, the overriding issue is whether or not the gift can be considered to benefit the Donor.

If a larger gift is anticipated (perhaps in the context of estate and tax planning), an application for permission must be made to the Court of Protection.

If you are concerned about your rights and responsibilities as an Attorney, we will be pleased to advise you.
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